State Budget Director John Chilton announced today Kentucky’s General Fund receipts for July, the first month of Fiscal Year 2019 (FY19), totaled $830.2 million, a 4.7 percent increase compared to July 2017 receipts.
The official revenue estimate for FY19 calls for revenue to grow 3.3 percent compared to FY18 actual receipts. Based on July’s receipts, General Fund revenues need to increase 3.2 percent for the remainder of the fiscal year to meet the official estimate. The FY19 official estimate consists of the December 2017 revenue estimate rendered by the Consensus Forecasting Group on December 15, 2017, plus an additional $192.3 million arising from final passage of HB 487. (House Bill 487 made various changes to the individual and corporation income taxes, as well as the sales and use, and tobacco taxes.)
State Budget Director Chilton noted that the impacts of HB 487 are readily apparent in the July collections. “Cigarette taxes collections rose $23.3 million over last July which is a direct result of the 50 cent per-pack increase in the cigarette tax, including the corresponding floor stock tax. Additionally, sales tax is now applied to selected services and it is expected to generate an additional $188.2 million in revenue this year. However, since most of the sales tax collected by retailers in July will not be remitted until August, most of the collections arising from the newly taxable services will not be begin until then. Furthermore, revenue gains from the more broadly applied sales tax will be offset somewhat by cuts in the individual and corporation income tax rates. (The top six percent rate has been cut to five percent.) As FY19 progresses, the interplay between the revenue enhancements and the tax cuts will become more clear – but for now, tax receipts are performing as anticipated in the revenue estimation process.”
Among the major accounts:
Individual income tax receipts rose 0.6 percent but withholding collections declined by 1.8 percent, primarily attributable to the decrease in tax rate.
Sales tax revenues grew 3.8 percent.
Corporation income tax collections declined 7.1 percent.
LLET receipts grew $4.4 million.
Cigarette tax collections rose by $23.3 million in July, primarily attributable to the boost in floor stock taxes.
Property tax receipts fell 12.0 percent.
Coal severance tax revenues fell 39.4 percent to an all-time monthly low of $5.2 million.
Lottery revenues rose 2.9 percent.
Road Fund revenues for July totaled $127.7 million, a 13.8 percent increase compared to last July. The official Road Fund revenue estimate for FY19 calls for revenue to decline 0.3 percent compared to FY18 actual receipts. Based on the first month’s receipts, revenues can fall 1.4 percent for the rest of the fiscal year and still meet budgeted levels.
Among the major Road Fund categories:
Motor fuels tax receipts rose 0.8 percent.
Motor vehicle usage tax increased 21.6 percent due, in part, to FY17 collections being under-reported as a result of a timing issue.
License and privilege taxes rose $5.4 million.
Additional information is available here: https://osbd.ky.gov/Pages/default.aspx